Log in
Research on the economic effects of minimum wages undertaken by Professor Stephen Machin and his co-authors changed the policy context before a National Minimum Wage (NMW) was introduced in April 1999. That and subsequent research, as well as Machin's appointment as Commissioner in 2007, have provided the guiding logic for the operations of the Low Pay Commission, the government body that makes recommendations on setting the NMW. As a result, research has directly influenced the annual setting of the NMW through 2008-2013, affecting the wages of over a million low-paid UK workers. Research has subsequently influenced policy debate in the UK, and in other countries including Germany, Hong Kong and Australia.
Southampton based research on the interactions of a minimum wage policy and tax evasion has had a direct and clearly acknowledged impact on shaping the labour market policies of Hungary and other Southern European countries, while its research on the role of universal versus targeted benefits on employment has had a significant impact on Swedish fiscal policy. Looking at labour market policies in a broader context and from a behavioural economics point of view (e.g. payroll giving), our findings on charitable giving and workers' motivation have also been used by the UK government's Behavioural Insights Team and impacted its recommendations on giving. The same research is currently influencing US policy on the tax treatment of charitable contributions.
"Gender equality in employment is recognised by policy makers and advisors (such as the Low Pay Commission) as an extremely important policy area." (Factual statement 1. Chief Economist and Deputy Secretary, Low Pay Commission); affecting as it does, all employees in the UK labour market. Research at the University of York analyses the gender wage gap at a national level, making a new contribution to the understanding of wage inequality in the UK. The three major stakeholder government departments (Low Pay Commission, Government Equalities Office, and Department for Business, Innovation and Skills) have used the research findings and policy recommendations in their wage policy development to reduce the gender wage gap in the UK. The report was personally identified by the Minister for Employment Relations as making an important contribution to the development of policy.
Professor Mark Stewart analysed the impact of the National Minimum Wage (NMW), providing a research-based answer to the question of whether a minimum wage would protect low skilled workers or leave them worse off by reducing demand for labour. Stewart analysed the NMW after it was introduced in 1999 and through subsequent upratings and consistently found negligible employment effects, modest hours effects, and little evidence of spillover effects. Stewart published reports and journal publications, supplying evidence that directly assisted the Low Pay Commission's (LPC) policy decisions. The minimum wage is now established policy, increasing earnings for millions of the UK's lowest-income workers and reducing income inequality and the gender pay gap.
Research by Alan Manning and colleagues at LSE's Centre for Economic Performance (CEP) has contributed to widespread acceptance of the view that minimum wages set at an appropriate level are a valuable tool of public policy. CEP researchers had a direct impact on the design of the UK's National Minimum Wage (NMW) and thus on the living standards of poorer workers and their families. They provided the intellectual context for the policy, advised on its implementation and evaluated its effects. CEP research has had some initial impact on the introduction of the minimum wage in Hong Kong. It has also influenced debates around the world about the introduction or modification of minimum wages.
Research on gender inequalities at the University of Manchester (UoM) has informed and shaped the development of employment policies advocated by key national and international bodies — such as the United Nations' International Labour Organization (ILO), the European Commission (EC), Eurofound and the Equality and Human Rights Commission (EHRC) — in their role as advisors of national governments and regulators. Impacts are twofold. By advancing international comparative analyses of gender inequalities in employment and job quality, EU employment policy has been informed. By analysing gender inequality trends, alongside evolving national policies, the research has successfully steered key debates around both `working-time' and `work-life balance'.
The UK National Minimum Wage (NMW) is a mandatory wage floor, set annually by government following recommendations from the Low Pay Commission (LPC) that directly affect around a million low-wage workers, their families and their employers and influence the UK economy more widely. Research at York on the effects of minimum wages on the labour market outcomes of low- wage workers, particularly on hours worked, wage growth and the incentives for young people to acquire skills/education, has contributed to the LPC's evidence-base and influenced recommendations by the LPC on the NMW rates. In addition the underpinning research has informed the recent Living Wage policy debate (nationally and locally in York) and has had impact via two important York employers (City of York Council (CYC) and Joseph Rowntree Foundation/Joseph Rowntree Housing Trust (JRF/JRHT)) in relation to their deliberations on the adoption (CYC) and the benefits of adopting this voluntary wage floor within their organisations; decisions that directly affected more than 600 York-based employees in early 2013.
Around 55,000 young workers in Britain have benefited from a 20 per cent wage increase as a direct result of research by Richard Dickens of the University of Sussex. His work led to a legislative change (which became effective in October 2010) whereby the starting age for eligibility for the adult National Minimum Wage (NMW) was reduced from 22 to 21 years old.
More generally, Dickens' research on the wage and employment effects of the NMW has long informed the recommendations of the Low Pay Commission (LPC) — on the rate at which the NMW is set, on the associated regulations and on the LPC's evaluation of the impact of the NMW. His research has provided the LPC and the government with strong validation for the use of the NMW as a policy tool for tackling low incomes and wage inequality. It also allays fears that the NMW might lead to a damaging wage-price spiral.
The long-term impacts outlined in this case study relate to low-paid women workers in health and local government sectors in the UK. Professor Carole Thornley undertook some of the earliest and most sustained academic research focusing on these workers. Through this she identified systematic undervaluation of their skills and competencies, as well as problems with training, career advancement, pay, and payment systems. The evidence from this research has been used in successive pay determination exercises and reviews of payment systems, valuation of skills, and to inform public policy. This has put these workers higher on the agenda of both unions and employers, informing their practice and leading to improvements in training and pay conditions.
Professor Pedro Martins' research expertise is on labour economics, including dismissals, wages and social returns of education. From June 2011 until February 2013, he was seconded from Queen Mary to undertake the key role of Portuguese Secretary of State for Employment. Informed by his research, he initiated and implemented a programme of effective labour market legislative reforms over a relatively short period of time. A reformed labour code (four changes of law) and several ordnances, resolutions and other policy change were the outcome, affecting individual dismissals, working time, collective bargaining, training and active labour market policies. His aim was to reduce unemployment by partly deregulating the labour market, so reducing the disincentives for firms to employ people, and by promoting active labour market policies to raise skill levels within the economy. The reforms affected approximately five million people. Following the reforms, Portugal moved to eighth place (in 2009 it was first) out of 34 countries in terms of the strength of permanent employees' protection (OECD Employment Outlook 2012); and unemployment fell, from 17.7% to 15.6%, and GDP increased, by 1.3%, between the first and third quarters of 2013.